Audit (for example, financial statement audit, corporate internal control audit, etc.)

review

Other assurance engagements (e.g., review of predictive financial information)

(1) Compilation of financial information; (2) Execute agreed procedures on financial information; (3) Tax consulting; (4) Management consulting;

user

Purpose: Reasonable assurance—credibility

Guarantee level

Base

Product: Audit Report

Prerequisites for performing audit work

Anatomy of Management Responsibility: Full Responsibility

general purpose preparation basis

Special purpose preparation basis

internal

external

previous audit

Implement quality management procedures

Supporting contradiction

Lack of information ~ audit evidence

Obtain reasonable assurance as to whether the financial statements as a whole are free from material misstatements due to fraud or error, allowing the CPA to express an audit opinion on whether the financial statements have been prepared in all material respects in accordance with the applicable financial reporting preparation basis.

Management/Governance Communication

Audit-Financial Report-Determination of each transaction, account balance, and disclosure level-appropriate

Management - expressed explicitly or implicitly

occur

integrity

accuracy

Deadline

Classification

Presentation

exist

integrity

Identification of rights and obligations

Accuracy, valuation and allocation determinations

Classification

Presentation

Integrity

independence

objective and fair

Professional competence and diligence

Confidential

good professional conduct

Attitude: Questioning, alert, cautious

Adhere to the concept of questioning

Be alert to situations that raise suspicion

Carefully evaluate audit evidence

Objectively evaluate management and those charged with governance

Helps CPAs to properly use professional judgment, Improving the effectiveness of audit program design and execution and reducing inspection risks are crucial to detecting fraud and preventing audit failures. want. Be alert to situations that raise concerns.

Professional judgment - the essence of the industry

Professional judgment ability-core competency

Knowledge, experience, professional skills

Independent, objective and fair

due professional skepticism

accuracy or consistency of opinion

Decision making consistency and stability

Justifiable

Before audit - possible

Related to the risks of the audited unit, independent of audit, objective existence

financial statement hierarchy

Recognition level

Depends on the rationality of the design of the audit procedures and the effectiveness of their execution

Not all transactions, balance accounts and disclosures are checked, and for other reasons it is not possible to reduce the risk of checks to zero

Proper planning of audit work

Appropriate assignment of responsibilities

professional skepticism

Supervision, guidance and review

There is a possibility of material misstatement and inappropriate audit opinions.

Audit risk = significant financial reporting risk * inspection risk

The principle of “certain two opposites”

Expression of risk: high, medium, low

Management or other personnel, not provided, all

Fraud and concealment, not an expert in identifying the authenticity of documents

unofficial investigation

Reasonable time, reasonable cost, audit opinion

Most audit evidence is persuasive rather than conclusive

Absolute guarantee that no fraud or error will lead to material misstatement

After completing the audit, it is discovered that it is not necessarily the CPA's fault.

The audit fee level is too low, the CPA’s competency is insufficient, and the CPA’s professional judgment is incorrect, etc.